ON MAY 25, 1989, DURING THE INITIAL PUBLIC OFFERING [CUSTOMER] AND [OTHER CUSTOMER NAMED] PURCHASED IN THE AGGREGATE THREE BONDS OF LAKE OAKS AT DEDOVEN (RACINE, WI) PROJECT, 5-YEAR EXTENDABLE MORTGAGE REVENUE BONDS, DATED 5-1-89 TOTALLING $27,000. THESE BONDS DEFAULTED ON NOVEMBER 1, 1992. THE TRUSTEE LIQUIDATED THE COLLATERAL AND PAID BONDHOLDERS APPROXIMATELY 33 CENTS PER $1.00 OF PRINCIPAL INVESTED. [CUSTOMER] ALLEGED THAT SUCH PURCHASE WAS SOLICITED BY PETER KRAUSE, A BROKER OF B.C. ZIEGLER AND COMPANY, WAS NOT SUITABLE.

$18,238.50

A SINGLE ARBITRATOR PRESIDING IN THE ABOVE ARBITRATION PROCEEDING RULED THAT [CUSTOMER] WAS AN UNSOPHISTICATED INVESTOR WHO HAD LITTLE UNDERSTANDING OF THE MARKET, AND TOTALLY RELIED ON THE RECOMMENDATIONS OF HIS BROKER, MR KRAUSE. THE ARBITRATOR FURTHER FOUND THAT FATHER [CUSTOMER] DID NOT UNDERSTAND THE RISKS ASSOCIATED WITH UNRATED BONDS. THE ARBITRATOR GRANTED AN AWARD OF $18,238.50 PLUS INTEREST AT THE WISCONSIN STATUTORY RATE. [CUSTOMER] HAD BEEN A CLIENT OF B.C. ZIEGLER AND COMPANY SINCE 1974. [CUSTOMER] RECEIVED AN INVESTMENT HISTORY OF PURCHASING NON-RATED NEW ISSUE BOND OFFERINGS. [CUSTOMER] RECEIVED A PROSPECTUS AT TIME OF OFFERING AND MR KRAUSE MADE NO RECOMMENDATION REGARDING PURCHASE SIZE. THE AWARD IS CALCULATED ON THE BASIS OF THE DIFFERENCE BETWEEN THE PURCHASE PRICE OF $27,000, AND THE AMOUNT OF LIQUIDATION PROCEEDS RECEIVED BY THE CLAIMANTS.